Below Is Production Possibilities Data for the Countries of Mental

question 66

Multiple Choice

Below is production possibilities data for the countries of Mental and Etheric.

-Refer to the information above to answer this question.Suppose that the two countries,who were producing at combination D before trade,now specialize and engage in free trade and establish the terms of trade at 1 unit of rice cake = 1.5 units of soya milk.If Etheric exports 30 million units of rice cakes to Mental,what will be the gains from trade for each country?

• A)Mental gains 30 million units of rice cakes and Etheric gains 45 million units of soya milk.
• B)Mental gains 45 million units of rice cakes and Etheric gains 30 million units of soya milk.
• C)Mental gains 15 million units of soya milk and Etheric gains 45 million units of soya milk.
• D)Mental gains 15 million units of soya milk and Etheric gains 5 million units of soya milk.
• E)Mental gains 15 million units of soya milk and Etheric gains 5 million units of rice cakes.

Distinguish between political revolutions and social movements.

Understand the basic elements that influence market economics including demand and supply.

Recognize division of labor and how specialization impacts economic organization and social structures.

Identify the key sectors of the economy and the types of activities associated with each.

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Definitions:

Fixed Costs

Costs that do not vary with the level of production or business activity, such as rent, salaries, and insurance, remaining constant regardless of output.

Competitors

Competitors are businesses or individuals that vie for the same customers or market share in the same industry.

Market Structures

The organizational and competitive characteristics of markets, defining the nature of competition and pricing within a market, including monopolies, oligopolies, and perfect competition.

Oligopoly

A market structure characterized by a small number of firms controlling a large market share, leading to limited competition.